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Tuesday Morning Coffee - Good news for sellers and buyers!

by Allison Simson & Joyce Nenninger

Happy Tuesday Morning to you!

The queue to climb aboard the recovery bandwagon continues to lengthen. The Wall Street Journal surveyed a gaggle of the best-and-brightest economists and found the majority of them believe the recession that began in late 2007 is over. In fact, many of these economists expect gross domestic product to grow 2.4% in the third quarter of 2009, spurred by inventory adjustments and strong demand for the “cash for clunkers” car-rebate program.

Reversal of fortunes in the housing sector has also turned many an economist's frown upside down. Existing-home sales in the second quarter of 2009 showed robust gains, according to the latest survey by the National Association of Realtors. Total sales of existing homes rose 3.8% to a seasonally adjusted annual rate of 4.76 million units in the second quarter from 4.58 million units in the first quarter. The news that 39 states experienced increases was particularly encouraging.

Meanwhile, home prices continue along their road to recovery. For the country as a whole, median sales prices rose 4% in the second quarter versus the first quarter, pushing the median price up to $174,100. Many metropolitan areas appear to be on a bullish tear of sorts: San Francisco posted an 18% gain; Boston , a 16% gain, Washington D.C. , a 14% gain; Dallas , an 11% gain; and Chicago , a 10% gain. Even more encouraging, thoroughly routed Phoenix and Miami posted price gains, albeit slight – both were up 1% for the quarter. One data point does not make a trend, to be sure, but quarterly sales prices have been dropping every quarter since mid-2007, so this upswing is notable. Now we'll just have to see if it is sustainable!

In Summit County, we tend to lag behind the Denver and National economies.  When the rest of the country was seeing major decline, we were seeing irrational appreciation (2006-2007), so it remains to be seen if our market will experience the pick-up the rest of the country seems to be enjoying.

We are seeing prices come down, but we are also seeing a seasonal uptick in number of sales. Good news for sellers and buyers!

We're looking forward to a nice LONG indian summer....it certainly is gorgeous today.  Hope you can come up and enjoy summertime in the mountains.  It's quite lovely!

For answers to your real estate questions, call Allison at 970-468-6800. Email - [email protected]. Allison is a long time local in Summit County. Summit Real Estate – The Simson/Nenninger Team is located at the Dillon Ridge Marketplace. Allison’s long-time residency and years of real estate experience can help you make the most of any buying or selling situation. She’s a Certified Residential Specialist (CRS), the highest designation awarded to a Realtor in the residential sales field.  Her philosophy is simple, whether buying or selling, she understands that the most important real estate transaction is yours.  Want to know the value of your Summit County property? Visit www.SummitHomeValue.com   

Tuesday Morning Coffee ~ Capital Gains

by Allison Simson & Joyce Nenninger
Happy Tuesday to you!   

Something to consider when selling your property is the Capital Gains ramifications. Will you owe Uncle Sam money after the sale of your Summit County home? I'm no accountant, but here's the quick and dirty: Capital Gains is calculated as the difference between what you paid for your property and what you sell it for. Here is how to calculate Capital Gains:

 Calculating Capital Gains

(+) PURCHASE PRICE - Price paid for property

(+) COST OF PURCHASE - Transfer fees, attorney fees, inspections

(+) COST OF SALE - Repairs, commissions, attorney fees, inspections

(+) COST OF IMPROVEMENT - Room additions, deck, for example, though not replacing existing

(=) ADJUSTED COST BASIS OF YOUR HOME

(-) AMOUNT YOU SELL YOUR HOME

(=) CAPITAL GAIN


Check with your accountant, of course, but even though the above calculation may indicate you owe Capital Gains, there are some special real estate exemptions. Since 1997, up to $250,000 in capital gains ($500,000 for a married couple) on the sale of a Colorado  home is exempt from taxation if you meet the following criteria: 

  • You have lived in the home as your principal residence for two out of the last five years. 
  • You have not sold or exchanged another home during the two years preceding the sale. 
NOTE: As of 2003, you may also qualify for this exemption if you meet what the IRS calls "unforeseen circumstances" such as job loss, divorce, or family medical emergency.

Don't forget about the 1031 Tax Deferred Exchange to defer any taxes on your second home or investment property.  Please give us a call if you'd like a brochure with more details. If your property doesn't meet the exemption criteria, keep in mind that the Capital Gains tax rate is pretty low- 15% right now.  The rate may or may not go up in 2010, but I think we can be pretty sure that it won't go down! 

A friend recently sent me a list of “Don’t Forget What You Already Know” quotes, and I’d like to share some of them with you:
 
 I’ve learned that, no matter what happens, how bad it seems today, life does go on, and it will be better tomorrow. 
 
I’ve learned that making a “living” is not the same thing as making a “life”. 
 
I’ve learned that if you pursue happiness, it will elude you.  But, if you focus on your family, your friends, the needs of others, your work and doing the very best you can – happiness will find you. 
 
I’ve learned that whenever I decide something with an open heart, I usually make the right decision.
 
I’ve learned there are 3 kinds of people:  those who make it happen, those who wait for it to happen, and those who look around and say “Hey, what just happened?”
 
I’ve learned that when you lose, don’t lose the lesson. 
 
I’ve learned that it does not matter what lies in front or back of us; it is what lies within us that matters. 
 
I’ve learned to avoid burning bridges…you never know if someday that bridge will be the one you must cross. 
 
I've learned the happiest people don't necessarily have the best of everything; they just make the best of everything they have.
 
I’ve learned that life is like riding a bicycle.  To keep your balance you must keep moving.
 
Make it a great day.....

Take risk out of second-home rental

by Allison Simson & Joyce Nenninger

Take risk out of second-home rental

Friends, neighbors often among best candidates

 

Question: Allison, we have owned our condo in Wildernest for 10 years and have never rented it.  We’re considering renting it now, but extremely nervous about the consequences of unknown renters.  Do you have any suggestions?

Answer: Good question!  While rent-by-owner agencies say it's a snap to find renters for your mountain property on the Internet, the best way to ensure your sanity -- and your second home's safety -- is to first consider renting mainly to family, friends and neighbors.

It's simply human nature. In most cases, consumers choose familiarity over the unknown almost every time. For example, borrowers historically have selected fixed-rate loans instead of adjustable-rate mortgages because they are predicable and not as risky.

When you consider family and friends first, you usually get the renter that you know and hopefully trust, who will give you less hassle and who is most likely to leave your getaway in the condition they found it.

The best potential pool of renters could be from the families that had properties close to yours. However, never overlook the business associates, teammates and casual acquaintances you see all the time in town. These two separate and independent groups can produce more than enough folks to fill your last-minute rental calendar.

Think about it -- how many weeks do you realistically have available? Wouldn't you want to fill your available weeks with somebody that you know? Why rent to a stranger who has contacted you off the Internet when the Fitzgeralds from the parish church known for their altar-boy kids would die to have the week you can't use before Labor Day?

It's a huge advantage to have personally witnessed how potential renters keep their own home. You'll rest easier knowing they probably will keep your place in much the same condition that they keep their own home. (Conversely, your visit to their home may be the primary reason NOT to rent to them!)

Casual friends and acquaintances often know the going rate and usually expect to pay -- so charge them. If your place clearly is on a resort's 50-yard line, has the best views, hot tub and feather beds, your friends and neighbors will be prepared to pay top dollar for your top spot. Rental agencies have found that the best locations and expensive abodes typically receive the most attention. Given a choice, the average person will splurge and select elegant over ordinary for a short period of time. It's especially true when you are on vacation or a corporation is picking up the tab. (Certain family members will never splurge, creating interesting dynamics)

If the getaway is in the middle of nowhere with no obvious amenities (besides serenity) and you have never rented it out, at least consider covering your utility and cleaning costs even if "nobody would be using it during that time anyway."

If you are renting to someone you already know, the chances are you probably won't sign a rental agreement. One of the most important things to do is try to set some ground rules before they move in. Discuss any issues (broken pipes, best place to park the boat trailer, no lifeguard at the pool) that you think could arise while they occupy your place. Preparation always helps prevent some awkward situations down the road.

Remember that you can receive tax-free income for renting your place a maximum of 14 days. Take a few moments to think about if there is a popular segment before the end of the year that would bring the biggest bucks. Is there a popular water-ski tournament that lures the best performers in the region to your lake? Given the economy, is it a good year to pass on the traditional winter carnival, thereby freeing up your slope-side cabin to a family very willing to pay top dollar for ski-in, ski-out accommodations?

For example, residents near Mount Vernon eagerly await the annual Once Around Lake Cavanaugh Footrace, an eight-mile fun run circling a crystal clear lake in the north Cascade Mountains. When the race date is chosen, families with homes near the lake plan their vacations. The days before and after the event are jammed with picnics, Hobie Cat regattas and fundraisers for the volunteer fire department. Lakeside cabins are scarce during "race week" and bring more rent than any other week during the year.

What is your remaining prime rental time this year? First consider the number of possible conflicts -- family reunions, weddings and can't-miss business trips -- on your upcoming annual calendar. If these events, coupled with the economic downturn, will keep you from taking your traditional vacation weeks, get the word out now. Copyright Inman News 2009.

 

For answers to your real estate questions, call Allison at 970-468-6800. Email - [email protected]. Allison is a long time local in Summit County. Summit Real Estate – The Simson/Nenninger Team is located at the Dillon Ridge Marketplace. Allison’s long-time residency and years of real estate experience can help you make the most of any buying or selling situation. She’s a Certified Residential Specialist (CRS), the highest designation awarded to a Realtor in the residential sales field.  Her philosophy is simple, whether buying or selling, she understands that the most important real estate transaction is yours.  Want to know the value of your Summit County property? Visit www.SummitHomeValue.com   

$15,000 Tax Credit

by Allison Simson & Joyce Nenninger

While attending the Star Power Conference in Denver  last week  , I heard the owners of the top real estate franchises speak.  One of the group has been working with Washington on trying to get a $15,000 tax to anybody who buys a house, regardless of whether or not they’re first time home owners or their income.  Seeing how the housing crisis led us into this recession, it will lead us out of the recession, and it’s critical that every means possible is used to jump start the housing market.

Something I always suspected but didn't have the real stats on was also revealed.  National statistics indicate that each home sale generates approximately $63,000 worth of cash infused into the local community, based on an average sales price of $300,000. This includes the fees that are paid to Realtors  , banks, title companies as well as the vendors and business who sell things most new homeowners make when they move into a house such as curtains, appliances, flooring, paint, furniture, etc; and the ripple effect from all of that spending that spreads throughout the local economy.

I encourage everyone to contact their senators and representatives in Washington to encourage them to pass this bill should it come to a vote. In my opinion, a $15,000 tax credit is well worth the $63,000 of local economic activity that is created with each average home sale, not to mention the benefit to the home buyer.

If you would like to know more about the $15,000 tax credit and buying an property in the  Summit County Colorado area , give me a call, I’d be happy to talk to you about it!

For answers to your real estate questions, call Allison at 970-468-6800. Email - [email protected]. Allison is a long time local in Summit County. Summit Real Estate – The Simson/Nenninger Team is located at the Dillon Ridge Marketplace. Allison’s long-time residency and years of real estate experience can help you make the most of any buying or selling situation. She’s a Certified Residential Specialist (CRS), the highest designation awarded to a Realtor in the residential sales field.  Her philosophy is simple, whether buying or selling, she understands that the most important real estate transaction is yours.  Want to know the value of your Summit County property? Visit www.SummitHomeValue.com   

 

Tuesday Morning Coffee

by Allison Simson & Joyce Nenninger
Happy Tuesday to you!   
    
Kelie and I had a fabulous time at this year’s Star Power Conference….it was fun, educational, and very motivational.  There were over 1,200 attendees including 180 top producing “Stars” from across the country exchanging ideas and experiences in hopes of mutually growing and improving their businesses. 
 
 On Saturday the general session included 4 real estate powerhouses….Jim Gillespie, the President of Coldwell Banker; Earl Lee, President of Prudential; Gary Keller, President of Keller Williams; and Allan Domb, a top selling agent in Philadelphia.  The message to Realtors that extends beyond real estate was….the market we’re in today is the one we have to deal with.  Don’t wait for it to get better…you get better
 
 A lot of time was spent discussing the economy.  Realtors are making a strong push to not only extend the $8,000 first-time home buyer credit that expires the end of November but to increase it to $15,000 for all primary residence buyers.  The current credit has definitely stimulated the “first-time” home buyer segment, however, many of these buyers are buying up bank-owned and short sale properties.  These sales are not creating the domino effect as anticipated.  If the credit is extended to all buyers, the real estate market would take-off.  
 
 A statistic that was shared that I found compelling is that the sale of one home generates an average of $63,101 of economic activity into the local economy.  21% of our GDP is real estate related. 
 
In summary, you’ve heard me say it before, “Real Estate is local”.  The national experts are anticipating Denver to be one of the first markets to recover from the housing crisis. This bodes well for the future of Summit County real estate because the majority of buyers here are from the front range of Colorado. The future looks bright!
 
And now for your Tuesday“Afternoon” Coffee…..”Stop waiting for the storm to end and start dancing in the rain.”
 
 
Make it a great day!
 
  
 
As always, our success is dependent on your
continued support and referrals. 

Who do you know that is planning a move?
 

Is Title Insurance Necessary?

by Allison Simson & Joyce Nenninger

Question:  Allison, our condominium in Wildernest is under contract and we just received the estimate for title insurance.  It seems really high and we’re wondering if it is necessary.

Answer:  Most people are trying to cut costs these days. Some even wonder if it's necessary to pay for title insurance when they buy or sell a home. Skimping here could end up costing plenty if you discover a title defect after you own the property.

Title insurance is paid for once at closing and covers the property for as long as you own it. It protects the purchaser from financial loss deriving from defects in the title to the property. The premium cost varies depending on the title insurance company, and is usually based on the purchase price.

Who pays the title insurance premium often depends on local custom and can vary from one county to the next. For instance, if you were to sell a home in Los Angeles County where the seller usually pays for title insurance, and buy in Alameda County where the buyers usually pay, you'll pay for title insurance twice during one move. It is customary in Summit County, Colorado for the Seller to pay the title insurance costs. Buyers typically pay the premium to cover their lender's interest in the property.

The payment of title insurance is not set by law and can be negotiated between the buyer and seller, although local custom usually prevails. Whatever is agreed to in the purchase agreement will dictate who pays the premium.

A buyer who was an attorney thought title insurance was expensive and a waste of money. Given his legal expertise, he decided he'd search the title record himself to avoid paying the title premium. In the end, his agent talked him out of the do-it-yourself approach based on the risks involved.

Title insurance companies search the title to a property to make sure that there aren't any defects in the chain of title. They also look for liens and easements recorded against the property, as well as establish who has marketable title to the property.

In one case, the title company discovered when searching the chain of title that when the property sold to the current owner, an heir to the estate had not signed the deed transferring title. This meant that person still had rights to the property.

Fortunately, the title company located the heir, who was reputable. She relinquished any interest she had in the property. If the heir hadn't been cooperative, the current owner could have made a claim against the title insurance company that issued title insurance to him when he bought the property. Title companies usually issue a preliminary title report, which is an offer to provide title insurance on the property. It is not the insurance policy, but it shows the results of the title search.

You and your real estate agent or real estate attorney should examine the preliminary report carefully to make sure the person who has marketable title to the property is the person who signed the purchase agreement. Also check for liens secured against the property.

Easements grant the right to use the property to someone other than the owner. Common easements are for utilities, sewer and drainage. Ask the title company to provide written copies of any easement and CC&Rs (covenants, conditions and restrictions), and to locate the easements in color on a copy of the parcel map. You can't build over an easement.

Both CC&Rs, typically found in condominiums and planned-use developments, and easements restrict your use of the property. Make sure you understand how these will affect your ownership interests before you complete a purchase.

If you find defects in the title, make it a condition of the purchase that the seller cures the defects before closing. Make sure that your purchase agreement includes a clause that gives you that right.

THE CLOSING: Ask your title officer, real estate agent or attorney for answers to any title-related questions. Copyright: Inman News 2009



 

 

For answers to your real estate questions, call Allison at 970-468-6800. Email - [email protected]. Allison is a long time local in Summit County. Summit Real Estate – The Simson/Nenninger Team is located at the Dillon Ridge Marketplace. Allison’s long-time residency and years of real estate experience can help you make the most of any buying or selling situation. She’s a Certified Residential Specialist (CRS), the highest designation awarded to a Realtor in the residential sales field.  Her philosophy is simple, whether buying or selling, she understands that the most important real estate transaction is yours.  Want to know the value of your Summit County property? Visit www.SummitHomeValue.com   

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Summit Real Estate
The Bright Choice
330 Dillon Ridge Way, Suite 10
Dillon CO 80435
970-468-6800
800-262-8442
Fax: 970-468-2195

Allison Simson, Owner/Broker, is a licensed Colorado Real Estate Broker